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It IS normal for PDC to come on front/rear when manoeuvrings at slow speed in other cars I've owned; my X5 worked like this and so did my CLK.
The E90 manual switch for the front PDC is a pain - my guess is that it's because the front PDC is an optional extra, so it's not integrated fully into the operation, hence the switch.
This has nothing to do with proximity alarm / pulling up to cars in traffic, it's just an aid when manoeuvring, and does occasionally would get triggered if a pedestrian walked close past the car whilst stationary, but that's occasional and no big deal. On the other hand, the car is always protected by PDC.
I remember on my test drive of a 335 almost hitting a car that I was closely manoeuvring past in the garage since I was waiting for the front PDC to sound as I didn't expect a manual switch.
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